Live-In Duplex Opportunity - Austin - (First Property!)

[Chase Smolik]

Hi BiggerPockets, 

Quick Background: First time property buyer/investor. I've made heavy use of the rental calculator, as well as read through the Ultimate Beginner's Guide and Duplex Investing Guide. I have been looking for properties in College Station/Bryan area purely as investment, but have decided to make a shift and move to Austin. With that, I thought it would be wise to look into small MFH, ideally, a duplex that I would happily live in for a few years and renovate. 

Abridged Background: Moving to Austin: Considering duplex with details below. Would love to connect with any contacts that know the Austin area, have investments or live there!

Area of Austin

Location is East Riverside which, from my understanding, is not the highly desired area, but one of major revitalization and quite a bit of new construction. It's convenient to down-town ~10-15 minutes to Zilker Park and in the other direction conveniently located ~10-15 min to the airport. 

The Property

The property is competitively priced, and visibly, calls for only minor repairs. All things considered, a thorough inspection is definitely a must, and personally I believe there is opportunity to increase value through renovation of both units. (Something I would like to do when/if I move in to the property.)

The Numbers

From my research, I do not expect live for free, especially in a duplex, and am already planning to spend up to the amount of rent I currently pay to live in one of the units: ~$1600 per month. The asking price on the property is ~$350k, the mean price of rent in the area for 2x1 is ~$1250 per month. (these units each have a garage and backyard) 

Obviously this doesn't make magic happen on the calculator, but while I'm looking at this property, it balances between a property that fits my personal needs for living, gives an opportunity to manage my own property, gain experience as a home-owner, and potentially serve as a buy & hold after I move out. 

Financing: As a first time home-buyer, I know I would easily qualify for an FHA loan, which would help me keep more cash in pocket, and I've also read a bit into 203k to help with the renovating costs, effectively increasing the rent income potential. To start a pre-approval process for an FHA loan, would it be best to use the hud.gov, FHA Lender list?

Other Thoughts:

1. This property will not likely have a positive cash-flow for a few years, but fits the bill for a property I would happily live in for a few years. Ideally, I would like a long-term renter in the other unit, which would give me an introduction into managing property, and further down the road potentially test the short-term rental market. 

2. Considering I'm paying rent for an apartment now (and looking to re-locate to Austin), should I be willing to pay an equal amount if it's building equity in property? (Even if the property doesn't have a positive cash-flow?)

Thanks in advance for any and all input.